Spending Bills Held Hostage

House Speaker Newt Gingrich, R-Ga., told a meeting of Ways and Means Republicans Wednesday that the GOP-controlled Congress would not send any appropriations bills to President Clinton for his signature until he signs a tax cut bill, two GOP sources told CongressDaily.

"We're not going to do any appropriations bills until we get a tax bill," one GOP source said the speaker told the tax-writing Republicans at a session they requested with Gingrich and House Majority Leader Dick Armey, R-Texas.

A second GOP source who attended the early evening session with the two top House GOP leaders confirmed that the speaker had pledged not to send Clinton any fiscal 1998 spending bills until the tax bill is signed. A Gingrich spokeswoman confirmed Wednesday night the speaker "did say that" in the meeting, but said Gingrich was only reiterating part of the bipartisan budget agreement with the White House that spending bills would be sent only after reconciliation bills are signed.

"It was the understanding in the agreement," Gingrich's spokeswoman said. "The speaker has stated this on numerous occasions."

However, the two GOP sources who spoke about Gingrich's comments indicated that the strategy of withholding spending bills until a tax bill is signed was news to them.

Meanwhile, Democratic sources said Wednesday that pressure was building on President Clinton to specify which provisions of the final tax bill he would veto and that Clinton could announce as early as today what his bottom-line position would be.

"The president is being urged to indicate where that line is in the sand," one Democratic source said. "Republicans are reluctant to give up what they thought they had won [on taxes in the budget agreement] and Democrats are concerned about whether the president will stand [on his tax cut principles]."

An administration source Wednesday night said that any suggestion that Clinton would draw the proverbial line in the sand on the tax bill today was "a rumor not worthy of publication."

A Clinton announcement of the specific provisions that would draw his veto on the tax bill could increase pressure on Republicans to decide how to proceed on the measure, which is in a House-Senate conference committee.

Sources said Clinton is likely to draw a veto line on four issues, that the bill contain no indexing of capital gains tax cuts, that it have the full $35 billion Clinton wanted for education tax credits called for in the budget deal, that the per-child tax credit be stacked before the Earned Income Tax Credit and that the final bill include the administration's empowerment zone proposal.

House Ways and Means Chairman Archer, ranking member Charles Rangel, D-N.Y., Senate Finance Chairman William Roth, R-Del., and ranking member Daniel Moynihan, D-N.Y., spent two hours discussing taxes Wednesday night with Treasury Secretary Rubin, Office of Management and Budget Director Franklin Raines and White House Legislative Affairs Director John Hilley.

Afterwards, Roth said the session was "not negotiating" but that "we made progress" on unspecified issues. He would not elaborate. A Roth aide said the Senate late Wednesday night delivered to the House a counter-proposal on taxes in response to the initial House offer made earlier this week.

At the meeting earlier Wednesday between Gingrich, Armey and Ways and Means Republicans, participants said they sought the session because they feared "maybe our leadership was willing to give too much" in tax negotiations with the White House on issues like the per-child tax credit, as one GOP member put it afterwards.

Ways and Means Republicans who attended the session said they were particularly concerned after seeing a front page story in Wednesday's Washington Times that carried a headline about how Gingrich might agree to provide the per-child tax credit to more low income families, a Democratic demand.

"They assured us that they're with us, they're going to stand tough," the member said of Gingrich and Armey.

Gingrich told the nervous tax-writers that he has not retreated from the House position on how to structure the per- child tax credit and that the Times headline was stronger than what the story said.

The member noted that "the more meetings like these I sit in, the more I feel there's no assurance we're going to get a deal" on a tax bill with the administration.

Rep. Nancy Johnson, R-Conn., said Ways and Means Republicans also wanted to make it clear to the two leaders that "we want $85 billion in tax cuts and we want it delivered to families and to capital gains."

Rep. Clay Shaw, R-Fla., said after the session with Gingrich and Armey that "I think everyone's satisfied that [the House position on key tax issues] is not going to be eroded" by the leadership in talks with the White House.

Archer said afterwards that the meeting helped "shore up the position that we're going to get $85 billion" in net tax cuts over five years.

A Ways and Means spokesman said after the session that the two leaders "saluted and said `we heard you'" after GOP tax-writers aired their feelings.

The issue of higher tobacco taxes, which the Senate included in its bill but the House did not, also was the subject of GOP meetings on Wednesday.

"There's a lot of heartburn on the House side over any tobacco tax increase," Archer told reporters. But, he said after the second meeting on tobacco, "we didn't decide anything.

Archer also told reporters that as of mid-day Wednesday "we're not anywhere close to resolving the major issues" dividing the House, Senate and White House in the tax bill.

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